On Oct. 1, 2000 the U.S. Healthcare Financing Administration (referred to generally herein as simply “Medicare”) changed the reimbursement terms for services provided to Medicare beneficiaries (also referred to as patients herein) who receive services provided by Medicare licensed Home Health Agencies (HHAs). Details of the change from the previous system which was called the Interim Payment System (IPS) to this latest system, referred to as the Prospective Pay System (PPS), are described in the Final Rule published in the Federal Register in June 2000. The methods previously employed under IPS by Home Health Agencies for projecting costs and reimbursements are rendered obsolete by the change to PPS.
Under PPS, the HHA is responsible for nearly all post acute patient care, including outpatient therapy and some supplies, that the patient receives in 60-day increments. These 60-day increments are called “episodes.” There are some exceptions which are not important to understanding the present invention, but nevertheless may be found in the appropriate Federal Register entries. Under PPS, the typical HHA must consider a multitude of conditions to determine the expected payment for each 60 day episode of care. Accordingly, the reimbursement is based on a number of factors. The first of these factors, the Home Health Related Group (HHRG), is the general category that determines a patient's need for services. The HHRG is assigned to a patient based on the result of an Outcome and Assessment Information Set (OASIS) Certification Assessment. This OASIS Assessment is performed in the patient's home at the initial Start of Care (SOC) or upon Recertification, i.e. the beginning of subsequent and contiguous 60-day episodes. These assessment types are termed as Reason For Assessment 1(RFA 1) and RFA 4, respectively. To determine the expected reimbursement for each episode, the HHA must take results of the RFA 1 or RFA 4 assessments. The result of these assessments determine to which HHRG the patient is assigned.
At present, the Healthcare Administration has defined 80 HHRGs. Each 60-day assessment assigns a specific HHRG to a patient. The HHRG has three major components, each correlating to patient needs. These components are Clinical, Functional, and Service. The Clinical and Service components are assigned values from 1 to 3. The Functional component is assigned values from 1 to 4. The value assigned to each component is an indication of patient need relative to that component. For example, a HHRG of C3F1S0 would indicate higher anticipated need for the Clinical component and a lower need for the Service component. Each HHRG is assigned a factor called the “Case Mix Weight.” This Case Mix Weight is multiplied by a standard rate which is the amount Medicare uses as a starting point for calculating the reimbursement to HHA's for any 60 day episode. Prior to Apr. 1, 2001 all HHAs had the same single standard rate of $2,115.30. As of Apr. 1, 2001 there are two standard rates: MSA standard rate and a non-MSA (i.e. Rural) standard rate. At that time, the non-MSA standard rate was $2,378.02 and the MSA standard rate was set at $2161.84. However, this has increased over time and as of Oct. 1, 2002 the non-MSA standard rate will be $2,375.33 and the MSA standard rate will be $2,159.39. As an example, for a patient who had his last billable visit on Dec. 1, 2000, the standard The Case Mix Weight for HHRG C3F1S0 was 1.2922. Thus, the unadjusted expected reimbursement for this patient is $2115.30*1.2922=$2733.39.
This unadjusted reimbursement rate is then further adjusted by additional factors. One such factor is the “wage index.” Medicare recognizes that different geographical regions have different market wages customarily paid to the nurses, therapists, medical social workers and home health aides to provide direct, hands-on skilled clinical and unskilled personal care services. Medicare has determined that for FY 2001 the portion of the standard PPS rate that may be adjusted by geographical region is 77.668%. The standard PPS rate may be considered as consisting of the two components. First, there is the “labor portion” which consists of agency expenses attributed to direct patient care (e.g. the direct cost of placing a caregiver in the home to provide hands-on care). Using a patient's residence, Medicare determines a multiplication factor using a table referred to as the Metropolitan Statistical Areas (MSAs). The values in this table are issued by the Office of Management and Budget (OMB). Second, there is the non-labor portion (e.g. an amount not adjusted and considered as the reimbursement for the non-labor related costs).
Thus the PPS reimbursement rate is generally determined by multiplying a standard rate by the case mix weight and then further adjusting this value by two additional adjustment factors, namely the labor/non-labor portion and the wage index. As an illustrative example, the formula for a wage adjusted PPS may be represented as follows:(CaseMixWeight*PPSRate*LaborPortion*WageIndex)+CaseMixWeight*PPSRate*NonLaborPortion).A numerical example based on a 60-day episode governed by the PPS and adjustment factors in effect as of Dec. 29, 2000 for a patient residing in Lafayette, La. would be as follows:                1.2922=Case Mix Weight (assuming the applicable HHRG is C3F1S0)        $2115.30=Standard National PPS Rate        0.77668=Labor Portion        0.22332=Non labor portion        0.8340=MSA adjustment factor for the patient's location (i.e. wage index)The expected reimbursement for the 60-day episode would be:(1.2922*2115.30*0.77668*0.8340)+(1.2922*2115.30*0.22332)=$2380.98        
There may be numerous prior art strategies to generate reports based on the anticipated reimbursement and the anticipated costs to provide clinical services. One method would be to divide the total anticipated reimbursement by the average cost of all of the visits. However, this approach does not take into account the differences in the costs for providing different types of care. For example a Medical Social Worker is often five times more expensive than sending a home health aide. An additional weakness of this strategy is the HHA employee who is scheduling visits for the 60-day episode uses reimbursement dollars as the budgeting tool. This is an inherent weakness in that it may lead the employee to believe that patient care is being rationed strictly according to reimbursement and that patient health care needs are less important than the reimbursement. Of course, this is an undesirable result since rationing care is completely contrary to clinical training. Additionally, PPS was constructed with the goal that within a HHA, patients who require more intensive care are “subsidized” by patients who require less intensive care. Nor do prior art methods readily take into account that reimbursement amounts must not only cover the direct cost of the care giver's salary and expenses, but must also cover the indirect costs of the HHA. Moreover, patients with high therapy needs will require more costly treatment which should be taken into account when allocating services. What is needed in the art is a method which aides HHA personnel in best allocating the number and type of care provider visits (e.g. nurse, therapist, etc.) a patient should receive while taking into account the budgetary constraints of the reimbursement system.